U.S. public pension funds continued to support ESG resolutions across party lines, according to a Morningstar analysis published Wednesday.
"Public pension funds haven't really changed as a group. They are very supportive of ESG," said the report's author Janet Yang, director of multi-asset alternatives research for Morningstar, in an interview.
Morningstar looked at proxy voting data for the 102 highest-supported ESG shareholder resolutions covering climate change, pay equity, workers' rights and other issues in the 2022 proxy season. It found that public pension funds supported key ESG shareholder resolutions 88% of the time.
That compares to 56% for general shareholders, and is noticeably higher than asset managers, where support decreased in the latest proxy season, even among those with sustainable funds, who averaged 74% support.
Public pension funds in Republican-leaning states had higher levels of support than asset managers or general shareholders, supporting 66% of ESG resolutions. That is a 14 percentage-point drop from the 2021 proxy season.
Public pension funds in Democratic-leaning states supported 87% of ESG resolutions, while support in split states increased slightly to 89%, Morningstar found.
You can definitely see a difference among political parties but overall they still support it," said Ms. Yang.